Pensions Fraud (Hansard, 24 October 1994)

§ 10. Mr. Spring
To ask the Secretary of State for Social Security what measures he will take to combat fraud in occupational pensions.

§ Mr. Arbuthnot
The great majority of schemes are well run. We will, therefore, impose the minimum burden on schemes and employers consistent with providing adequate security. We propose a clear framework of statutory obligations on employers, trustees and professionals, backed by a powerful regulator who will focus on schemes with problems.

§ Mr. Spring
Will my hon. Friend confirm that about 20 million people in the United Kingdom have rights to an occupational scheme and that that is about a quarter of 622 all personal wealth in Britain or some £500 billion, which is a greater sum than in all the other countries of the European Union put together?

§ Mr. Arbuthnot
I will indeed confirm that. Our pension policy is the envy of Europe. We have given millions of people the right to build up funds for their retirement. Our proposals will be very good for pensioners and for the future economy of this country.

§ Mr. Flynn
Do the Government accept that the major fraud in occupational pensions involved the 500,000 people who were persuaded against their financial interests to leave occupational pensions and go into personal pensions? Will the Government accept their debt in that? Will the hon. Gentleman explain why, while the Prime Minister is promising to double the standard of living in the next 25 years, he is also promising to halve the value of the state pension in the same period?

§ Mr. Arbuthnot
Dealing backwards with that rather backwards question, the Government have always promised that the state retirement pension will be uprated in line with prices. That is a promise that we have kept and will keep.
As regards the mis-selling of personal pensions, an announcement is expected shortly and the hon. Gentleman should curb his impatience. The Government have made it clear that we expect the Securities and Investments Board to ensure that there is a full investigation of any mis-selling, and that anybody who has suffered a loss through mis-selling should have redress.
As regards pensioners' incomes, pensioners in this country have had their incomes increased on average by 50 per cent. in real terms since 1979. That is a higher increase than the rest of the population. The Government have been able to give £1.2 billion since 1988 to those without other earnings who have not had those increases. Pensioners are doing extremely well.